The cerebral cortex is the substrate of human mental prowess. It is believed that its increase in size, with gyrification and expansion of upper layer neurons, mediates the growth of intellectual capacity during mammalian evolution. Species-specific cortical cytoarchitecture is largely determined during embryogenesis, integrating both cell autonomous and non-autonomous mechanisms. We are just beginning to understand the mechanisms regulating cortical size and gyrification, with contribution of specific secreted molecules into development of these cortical characteristics being particularly understudied. During development, the cerebral cortex arises in the telencephalon, lateral to the telencephalic dorsal midline. Several signaling centers have been described in the developing telencephalon, including a mesenchymal derivative meninges and the telencephalic dorsal midline, subdivided into the choroid plexus (ChP) and cortical hem (CH). In addition to secreting signaling molecules, the ChP also produces cerebrospinal fluid that nourishes and protects the brain, while the CH is a major germinal zone in dorsal brain. While analyzing the role of the transcription factors Lmx1a and Lmx1b, we found that Lmx1a/b double, but not single, mutants have an extraordinary phenotype of a compromised telencephalic dorsal midline, and expanded, yet layered neocortex with local overgrowths resembling gyri and an increased number of upper layer neurons. In addition, in Lmx1a/b double mutants, the segregation of the dorsal midline lineage from more lateral neuroepithelium was severely compromised, with dorsal midline progenitors aberrantly dispersing into more lateral neuroepithelium, including the neocortex. To our surprise, we found that Lmx1a and 1b are never expressed in the neocortex nor coexpressed in the telencephalon. Instead, during development, Lmx1a expression is limited to the ChP and CH while Lmx1b is expressed in the adjacent head mesenchyme, suggesting that previously unrecognized mesenchymal-dorsal midline interactions regulate key aspects of the telencephalic development. The goal of this proposal is to define Lmx1a/b - dependent mesenchymal / neuroepithelial pathways regulating development of the telencephalic dorsal midline and neocortex. In Aim 1 we will define how Lmx1a and 1b regulate the telencephalic dorsal midline patterning and CH growth, two poorly understood processes, which are critical for proper formation of the ChP and CH. In Aim 2 we will identify a new role of dorsal midline signaling in neocortical gyrification and expansion of upper layer neurons, and define dorsal midline secreted molecules mediating these processes. In Aim 3 we will define an Lmx1a/b-dependent molecular pathway regulating the segregation of the dorsal midline lineage from more lateral neuroepithelium and show that this process is critical to achieve proper cortical size in mice. Our studies will identify novel fundamental mechanisms regulating telencephalic development and are likely to provide new insights into cortical evolution and human developmental brain disorders.